Sequestration: Where will the cuts hit?

When it comes to sequestration, President Barack Obama and most lawmakers would prefer to just not go there.

That’s especially true in talking about how the administration would go about implementing the first installment of about $100 billion in across-the-board spending cuts set to go into effect Jan. 2 absent a last-minute deal with Congress to avert them.

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Fiscal cliff: A primer

Searching anxiously for answers are defense contractors, teachers, health care workers and, for that matter, all Americans who rely on government services like meat inspectors, airport baggage screeners and national park rangers.

But as they wait for the White House and House Speaker John Boehner’s office to show sign of progress, some of the most basic questions linger about what happens to government operations if talks break down. And budget experts say there’s good reason for the information vacuum.

“This is virgin territory,” said Jim Dyer, a Republican who was House Appropriations Committee staff director. “We’ve not been here before.”

In the spirit of at least talking about uncomfortable things, here’s a look at five key questions surrounding sequestration:

Who’s in charge?

Introducing Jeffrey Zients.

He’s a multimillionaire former CEO with a pedigree in making government more efficient. For the purposes of the fiscal cliff, he’s also the acting director of the White House Office of Management and Budget, meaning he’ll be the one making many key decisions and writing critical guidance memos explaining what the government agencies should do if sequestration starts.

While White House aides have insisted for months that they weren’t planning for this scenario, Zients has been told to get started — just in case. That’s meant sending warnings to budget officers and legal counsel across the government ordering them to start crunching their own numbers ahead of the fiscal cliff deadline.

One of Zients’s toughest calls will involve how much wiggle room to give agencies when they apply the across-the-board cuts to their programs, projects and activities.

Most agencies will want considerable discretion to decide what’s best for them within each of those broadly defined categories. But it’s far from clear that OMB will let them have it.

How specific will OMB and the agencies be?

Zients is likely to issue a report as early as Jan. 3 — the day after sequestration would take effect — explaining a good bit about implementation of the spending cuts.

What’s clear now is that the Budget Control Act, which passed last year, prompting this entire process, included specific percentages for agencies to cut over the next decade in order to reach total savings of $1.2 trillion: a 9.4 percent reduction for most parts of the Pentagon and 8.2 percent drop for most discretionary nondefense agencies.

There are also some exemptions, including for military personnel and the Defense Department, which has the freedom to shuffle money around for war and military readiness. But the cuts are sure to hurt, especially now because the first installment needs to be squeezed into the final nine months of the current fiscal year.

Readers' Comments (2)

Obama waited until the Mayan calendar ran out to face his Tax Cuts ending, over spending, and borrowing the U.S. into terminal debt dilemmas still hoping that he could blame the end of the world and the GOP for his own faults and lack of leadership.